NEW DELHI: Aditya Puri, the Managing Director of HDFC Bank, has said he sees no future in digital wallets. Speaking to ET Now, Puri was skeptical about this new trend in digital payments, especially of Paytm which gained huge traction after demonetisation.

Puri said Paytm could not be another Alibaba because its model could not be replicated.

He said the current loss of Paytm was at Rs 1,600 crore and its economic model was doubtful.

After demonetisation, people have grabbed whatever is easily available to pay for coffee, bills, movie tickets, cab rides and just about anything, and Paytm has scored over others.

However, as alternatives to cash payments evolve, users comfortable with mobile wallets today could shift to an easier digital platform.

Experts say that in the long term, systems like UPI stand a better chance as they enable direct transfer from bank accounts.

Mobile wallets have gained popularity after demonetisation but as new digital payment options emerge, they may fade away as they have several limitations.

For one, they are not interoperable. Transferring money requires sender and receiver to have the same company's account.

Besides, the money transferred to a wallet does not earn interest. Small merchants can't draw more than Rs 25,000 a month from a digital wallet, which affects cash flow.